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Americas Newsroom

News/Business. Bill Hemmer, Martha MacCallum. News coverage and discussion. New.

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Us 27, Sebelius 13, Madam 10, Cgi 9, California 7, Mr. Barton 5, Washington 4, Mr. Waxman 4, Aca 3, Michelle Snyder 3, Hhs 3, America 3, Texas 3, Florida 3, Medicare Part-d 2, Waxman 2, Jeffrey 2, United States 2, Mr. Pallone 2, Kathleen Sebellius 2,
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  FOX News    Americas Newsroom    News/Business. Bill Hemmer, Martha  
   MacCallum. News coverage and discussion. New.  

    October 30, 2013
    6:00 - 8:01am PDT  

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contractors and stark, or accelerate what's becoming a pretty significant blame game. >> you wonder how many people accept that. why do you believe the stakes are so much higher today? >> i think people know cath sebelius. people know who she is. she's the secretary of health and human services. even if marilyn tavenor was the behind the scenes head of the rollout, kathleen sebelius is much better known. people have been call she couldn't answer a very basic question, about why not suspend the individual mandate. bill: that is fred upton, the chairman of the committee who was with us on our program just
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yesterday. we want to remind viewers as we peel away the layers of this law from march of 2010 when then speaker of the house nancy pelosi said this about obamacare. >> but we have to pass the bill so that you can find out what is in it away from the fog of the controversy. >> now we're finding millions of americans could have their insurance dropped as a result. steve, want to p put you on pause in a moment. when we come back we'll talk about the politics. 10 any hoyer said yesterday the law should have been more precise. you wonder how many more democrats are falling into that way of thinking, but, steve, standby. there is sebelius in the room. martha has more. martha: shaking hand to say hello to everybody as she gets ready to go here. a lot of smiles and friendliness on way in. we'll she as she sits at table. the lead contractor on
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healthcare.gov, warned her, warned hhs, the holt and human services website was not ready to go. so what under after that is one of the big questions that we expect kathleen sebellius will get. chris stirewalt joins me right now. that is the big issue, what did you know and when did you know it and why didn't you delay? >> there is another overarching question related to that business, why did it take so long and cost so much to be so bad? that doesn't quite make sense. they had more than three years. they had more than $300 million and it's a total disaster. so why is that? but if you think about her strategy in this, she refused to come last week. instead went out on a campaign tour, angry campaign tour, accusing republicans, don't you dare and by goodness, by gollly, thinking by the time she got back she would have better answers for the folks. instead what happened while she was gone gone it came out the
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law was worst than she thought. martha: there were people who want me to resign. i don't work for them. i don't work for those people. now all the people that she works for across america are watching this and here's fred upton as he gets ready to gavel this meeting in. heavy lift from the very beginning, this entire health care plan, chris, quickly if you can. you know what, chris? hold that thought. we'll go in and listen. we'll be back to you in a little bit. let's see what is going on. >> welcome as thesident's point person on health care. secretary sebelius is part of our continuing overnight of the -- oversight of health care law and we look forward to a thoughtful conversation on a number of issues including transparency and fairness. over the months leading up to the october 1 launch the secretary and her colleagues at hhs repeatedly looked us in the eye and testified everything was on track. despite the numerous red flags and lack of testing they assured us that all systems were a go.
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but something happened along the way. either thoseknow how bad the si, or they did not disclose it. and sadly here we are now five weeks into enrollment and the news seems to get worse by the day. healthcare.gov was down last night at 5:00 p.m. it was also down on monday and it crashed last weekend. and even this morning, when we attempted to view the site before the hearing, we were hit with an error message. but this is more than just a website problem. that was supposed to be the easy part, remember? americans were assured that their experience would be similar to other online transactions like purchaseing a flight or ordering a pizza and that their sensitive, personal information would always be secure. but after more than three years to prepare malfunctions have become the norm and the administration has pivoted saying they're on track to seting a new target date of november 30th. for those few americans that successfully applied, will the
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website glitches become provider glitches come january 1st? americans are scared and frustrated and this situation should rise above politics. many folks at home watching us today spent hours or even days trying to sign up. they continue to take time away from work or loved ones but have made little progress. soon they may worry about being on the wrong side of their government facing potential penalties. i recently spoke to a woman from buchanan, michigan, who was excited to sign up but has since become very disillusioned after spending hours on the phone and website with little success. there are also millions of americans coast to coast who no doubt believed that the president repeated promises if they liked their plan they would be able to keep it, no matter what. they're now receiving termination notices. for those that lose their coverage they like they may be losing their faith in their government. today's hear something about fairness for the american people who are losing their coverage or seeing their premiums skyrocket
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as high as 400%. this hearing is also about transparency. while administration continues to post the number of americans that have applied they intentionally withold precise enrollment numbers. why? these numbers are critical to fully understand the status to gauging the progress of implementation. lead contractor cgi testified only last week that they had the data but needed the administration's permission to release it. we asked the secretary on octoberth for those figures but we still have not received a response. we hope to get one today. the american people deserve helps answers as well as peace of mind that promises will be kept. the secretary has an opportunity today to embrace transparency and start restoring the public's faith in the administration and the government. i yield to my colleague, ranking member of the committee, mr. waxman. >> thank you, mr. chairman. i'm pleased secretary sebelius is here today. she's here to discuss the
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affordable care act, just like with medicare part-d, the launch of the new website has not gone well, but just like medicare part-d, the early glitches in this rollout will soon be forgotten. a lot of the discussion today will focus on that website. this is an important issue and i want to learn what the secretary can tell us about the problems being experienced and how they will be fixed, but we should keep this issue in perspective. the affordable care act is working. it has been improving the health, security of millions of americans for the past three years. because of the affordable care act, more than seven million people on medicare have saved more than $8 billion on their prescription drugs. more than 100 million americans have access to free preventative
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coverage. and no longer face lifetime limits on their coverage. over 10 million americans have received rebates from insurance companies. and finally, this january, the worst abuses of insurance industry will be halted. never again will a family be denied coverage because their child has a chronic health condition. never again will individuals see their premiums shoot up because they got sick or faced an unexpected medical expense. never again will a woman have to pay twice as much as a man for the same insurance. that is why allowing insurers to continue offering deficient plans next year is such a bad policy. the law says that all plans, except those that were
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grandfathered in 2010, must meet the new consumer protection standards. if we don't enforce this policy, insurance companies can continue offering flimsy coverage that disappears when people actually need it and no one should want that. it is understandable that there will be a focus today on what isn't working but we must also remember what is working. the health insurance plans that are being offered in the exchanges are good plans. their premiums are much lower than expected. 60% of the uninsured individual shopping in the new marketplaces will be able to get coverage for less than $100 per month. half of the young adults will be able to get coverage for less than $50 per month. and since congress adopted the affordable care act, health care costs across the whole economy have grown at the lowest level
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in decades. the success of the affordable care act is due to the efforts of many people but one individual more than any other is responsible for the all the good that has been accomplished and that is our witness today, secretary sebelius. so i would urge my colleagues to stop hyperventilating. the problems with healthcare.gov are unfortunate and we should investigate them but they will be fixed and then every american will finally have access to affordable health insurance. thank you, mr. chairman. >> thank you. before we swear in secretary sebelius i want to clarify energy and commerce committee practice for the swearing in of witnesses. the committee typically has two types of hearings, oversight hearings and hearings that focus on legislation and policy. secretary sebelius for example, is testified previously before our committee to discuss issues related to the hhs budget or other policy matters.
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as is the case with all policy witnesses, secretary sebelius was not required to take an oath prior to testifying. today's hear something different. it is an oversight hearing. it is a long-standing committee practice to swear in all witnesses at oversight hearings whether they be private citizens or cabinet secretaries. >> mr. chairman, i thank you for your comment and want to join you simply explaining that, swearing in of the witness before an oversight committee hearing is always been under oath. that is a standard procedure in this committee when we're conducting an oversight hearing. so it may seem strange to have the secretary of health and human services have to be sworn in but all witnesses in an oversight hearing are sworn in and that is our procedure. >> thank you. so i would now like to introduce our witness for today's hearing, the honorable kathleen sebellius is the secretary of the
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department of health and human services. she was appointed to this position in april of 2009. and was sworn in as the 21st secretary on april 28th, 2009. so, i will now swear you in. if you would rise and, as ranking waxman and i just discussed the committee is holding an investigative hearing and when doing so have the practice of taking testimony under oath. do you have any objection to testifying under oath? >> [inaudible] >> the chair advises you that you are, i will now read you the oath. do you swear that the testimony you are about to give is the truth, the whole truth and nothing but the truth? >> [inaudible] >> you're now under oath and subject to the penalties set forth in title 18 section 1001 of the u.s. code. you may now give a five-minute summary of your written statement. welcome again, thank you for being here.
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you got to use that mic. you don't know how many people want to hear you this morning. >> thank you, chairman upton, ranking member waxman, members of the committee. unless my position as governor of kansas four 1/2 years ago for the opportunity to continue work i've been doing for most of my over 35 years of public service, to expand the opportunities for all americans regardless of geography or gender or income, to have a affordable health coverage. during my years as the state legislator, as an elected insurance commissioner, as head of the national association of insurance commissioners, and as a two-term governor and now as a hhs secretary, i have worked on that effort that i care deeply about. there's still millions of americans who are uninsured as well as underinsured. people who have some coverage at some price for some illness but have no real protection from
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financial ruin and no real confidence they will be able to take care of themselves or families if they have an accident or illness. for them a new day has finally come. in these early weeks, access to healthcare.gov has been a miserably frustrating experience for way too many americans including many who have waited years and in some cases their entire lives for the security of health insurance. i am as frustrated and angry as anyone with the flawed launch of health care got governor. so let me -- healthcare.gov. let me say directly to these americans. you deserve better. i apologize. i'm accountable to you for fixing these problems. i'm committed to earning your confidence back by fixing the site. we're working day and night and will continue until it is fixed. we recently added new management talent, additional technical expertise and a new general contractor to identify, prioritize, and manage fixes
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across the system in two broad categories, performance, which deals with speed and reliability, and function which deals with bugs and problems in the system. our extensive assessment has determined that health care dot-gov is fixable. i want to outline a couple improvements we made to date. we have more users, successfully creating accounts. we can process up to 17,000 account registrations per hour or nearly five per second. instead of some of the users seeing a blank screen at the end of the application process they can now see whether they're eligible for financial assistance and make more informed decisions. because we've improved performance customers can shop for plans quick lift filtering plans takes seconds, not minutes. users are getting fewer errors and time out message as they move through the application process and the system has been strengthened with double the size of servers with better
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software optimized with a higher capacity physical database which replaces virtual system. the chairman referred to outages this weekend and again yesterday and i would suggest to the committee if you read the statement of verizon who hosts the cloud service, it is the verizon server that failed, not healthcare.gov and it affected not only hhs but other customers. we still have a lot of work to do. we have a plan in place to address key outstanding issues. it includes fixing bugs in software that prevented it from working the way it is supposed to and refreshing the user experience so folks can navigate the site without encountering error messages time out and slower response times and by the end of november we're committed that the vast majority of users will be able to review their options, shop for plans and enroll in coverage without the problems, way too many have been experiencing but consumers are using the site every day and continue to do and problems are
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being solved. but we know we don't have a fully functioning system that consumers need and deserve. we're still at the beginning of a six-month open enrollment which extends through the end of march and there is plenty of time to sign up. just to put it in perspective the average open enrollment for an insurance plan is two to four weeks. the new marketplace has a 26-week open enrollment and those who enroll by december 15th will be able to access benefits on day one. even with the unacceptable problems with health care dot-gov which we're committed to fixing the affordable care act by any fair measure is working for millions of americans who are benefiting from new health security, young adults americans living with preexisting health condition, seniors on medicare. 85% of americans who already have health coverage are protected with new rights an benefits. the 15% of our neighbors an friend who are uninsured have a
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affordable new options in a competitive market and cost growth for health care is lower than it has been in years. millions of americans are clearly eager to learn about their options and to finally achieve health security, made possible by the affordable care act. and my commitment is to deliver on that promise. thank you, mr. chairman. >> >> thank you very much. the mic got pulled a little bit from you. i appreciate you being here this morning and we worked with our leadership to see that we don't have votes on the house floor this morning. so we won't be interrupted. i appreciate your, your time for sure and in an effort to allow every member to ask a question we're going to be reducing the time for questions to be just four minutes, so hopefully we can get through all of the members that are here.
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and i'm going to be pretty fast with the gavel, let me just say. we have got plenty of questions. so let's try and get through them. you know i think everyone in america remembers the president's words. if you like your health care plan you can keep it. period. under the affordable care act insurance policies that were in effect on march 23rd, 2010, when the law was enacted would be grandfathered. then a few months later, despite the president's word you all at hhs helped promulgate a new reg that in your own review showed that it effectively could deny perhaps as many as more than 50%, maybe even higher, of those holding individual policies the right to renew their own insurance plan. and i would guess that there are a lot of us on this panel today that are hearing from angry and confused constituents who are now being forced to go on to an inept website, whether they like
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it or not, to shop, for a new replacement policy. they're finding premiums, often more than 100% what they're paying before, some even as high as 400% as i have heard from and rising deductibles as well. so when was the president's specifically informed of the regulation change and if so, was it pointed out that this totally undermines his biggest selling point? and i would note, that on the screen in a statement that he made more than three years after the regulation change was promulgated, the president said again, so the first thing, you need to know is this. if you already have health care you don't have to do anything. so he has been on the same page from the very start yet the regulations changed months after the by was enacted, that are now causing perhaps, millions of americans to be denied the
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ability to renew their individual coverage. why was that change made and did the president know it? >> well, mr. chairman, there was no change. the regulation involving grandfathered plans which applied to both the employer market and the individual market indicated that if a plan was in effect in march of 2010, stayed in effect without unduly burdening consumer with reducing benefits and adding on huge costs, that plan would stay in effect and never have to comply with any of the regulations of the affordable care act. that is what the grandfather clause said. the individual market which affects about 12 million amer market, people move in and out. they often have coverage for less than a year, a third of them have coverage for about six months, and if a plan was in place in march of 2010 and again did not impose additional burdens on the consumer they still have it.
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it is grandfathered in. >> why not let the consumer decide whether they want to renew it or not? why were regulations promulgated in the summer of 2010 that then undermined the ability for those folks to resign up which is one of the reasons for the large number -- >> there were no regulation changed. we outlined the grandfather policy people could keep their own plan. we then began to implement the other features of the affordable care act. if someone is buying a brand new policy on the individual market today or last week they will have consumer protections for the first time. many people in the under individual market are medically underwritten. that will being illegal. many women are charged 50% more than men. that will be illegal. you can not again eliminate someone because of a preexisting health condition. you can't dump someone out or lock someone out. so those provisions, but if again a plan is in place and was in place at the time that the president signed the bill and the consumer wants to keep the plan, those individuals are
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grandfathered in and that is happening across the country in the individual market. >> we're learning in fact that folks who did have a plan who liked it in fact are being told that it is canceled in the last, my time has expired. let me yield to the ranking member, mr. waxman, for four minutes. >> thank you, mr. chairman. i had to smile at your line of questioning because everybody expected this hearing was about the website. that is all we've been hearing is about the website but that is not the only complaint we've been hearing about since the affordable care act was adopted. we were told by our republican friends that millions of jobs would be lost. in fact there have been a gain of seven million jobs. they said that the costs for health care would skyrocket and in fact the opposite is true. they said there would be a massive shift to part-time jobs. the evidence doesn't support that. they said 10 of millions will lose their insurance but in fact everybody in this country is going to have access to health
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insurance because they won't be discriminated against. they said that it would explode the deficit. and yet all the reputable organizations like the congressional budget office have told us that it is going to save us $100 billion over 10 years. so we've had a litany of objections from the republicans about the affordable care act which have driven them to such a frenzy they even closed the government! so now we have you before the committee. and you're being asked, i suppose later, you will be asked about the website but let me pursue this question about individuals who have gotten notices that they're going to have their individual insurance policies canceled. they will be able to get another plan, won't they. >> actually it is the law they must get another plan. continuous coverage is part of the law. >> so -- >> that wasn't the case in the past. >> so the affordable care act said we're going to end the worst abuses of insurance
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companies. we're going to create consumer protections in the marketplace they will be able to buy a policy even if they have been sick in the past. that women won't be charged more than men. that we'll not let insurance companies deny coverage because of preexisting conditions. we're not going to let them put these lifetime caps and they will be an essential benefit package so you're not just buying some things and not having other things covered. you're going to have the minimum that everybody should have, prescription drugs, mental health coverage, doctors and hospitals. are these important consumer protections? >> well i would say, mr. waxman, they're very important. as a former insurance commissioner i can tell thaw the individual market in kansas and anywhere in the country has never had consumer protections. people are on their own. they can be locked out, priced out, and dumped out and that happened each and every day. this will finally provide the kind of protections we all enjoy
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in our health care plans. as part of a group, as part of a plan that has prenegotiated benefits, we enjoy that kind of health security and individuals in the buying insurance on their own, farm families, entrepreneurs, mom-and-pop shops, young adults, have never had that kind of health security. >> now they're going to have this health security and most of the plans, as i understand it, that they are no longer they will be able to keep don't meet all the standard of the law? >> well, again i think you may have heard pat garity from florida blues who was on some of the sunday shows and he talks about the fact that the florida plans want to keep their customers. they have new plans to offer. they feel that a lot of people, and these are mr. guarranty's words, will have a much better plan at similar or lower costs. 50% of these 11 to 12 million people qualify for a subsidy,
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qualify for financial help, purchasing insurance for the first time ever. >> bottom the line is that people with coverage like medicare, medicaid, employer coverage can keep that. people with grandfathered plans in the individual market will be able to keep it but if a insurance company sold you a new modified health insurance policy after the date of the enactment that does not meet the law's standards, then those people will be able to go into the exchange and buy a real, solid, health insurance plan that won't discriminate against them or anybody else? i think that's a good result. i'm pleased with it and i think most people will be as well. >> gentleman's time has expired. chair would recognize the vice-chair of the committee, ms. blackburn. >> thank you, mr. chairman. madam secretary, before, during and after the law was passed the president kept saying if you like your health care plan you can keep it. so is keeping his promise? >> yes, he is. >> okay.
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what do you say to the 300,000 people in florida you just mentioned or to the 28,000 in tennessee that can not get health insurance? their plans are terminated. is keeping his promise to them? >> first of all, congresswoman, they can get health insurance. they must be offered new plans, new options, either inside the marketplace or if they don't qualify for a financial subsidy they can shop, they absolutely will have new coverage. >> what do you say to nbc news who says millions will lose their coverage? >> in all deference to the press corps, many of whom are here today, i think that it's important to be accurate about what is going on and i would defer again to the president of the blues plan. >> reclaiming time. >> they will be offered new plans. >> madam secretary, let me tell youing. >> -- while. >> what do you say to mark and lucinda in my district, they had a plan, they liked it, it is
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affordable and now it is being terminated and now they do have health insurance? >> insurance companies cancel individual policies year in, year out. they are one-year contract with individuals. >> okay. >> they are not lifetime plans. they're not employer plan. >> let me move -- on. if what they wanted, i will remind you, some people like to drive a ford, not a ferrari. some people like to drink out of a red cup not crystal stem. you're taking away their choice. let's put the screen shot up. i want to go to the cost of the website and talk about the website. this is what is happening right now with this website. we had somebody in the back trying to sign on. it is down. it is not working. last week i asked for the cost, from each of the contractors that were with us last week. so, can you give me a ballpark, of what you have spent on this website that does not work, that individuals can not get to? what is your cost estimate?
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>> so far, congresswoman, we have spent about $118 million on the website itself. and about $56 million has been expended on other i.t. to support the web. >> okay. would you submit a detailed accounting of exactly what has been spent and when do you expect constituents to stop getting these kind of error messages? >> again, i was with the, talked to the president of verizon over the weekend on two occasions. verizon hosts the cloud which is not part of the website. it's a host for a number of websites. >> right. >> the verizon system was taken down saturday night into sunday. was down almost all day sunday. they had an additional problem they notified us about yesterday and continues on. i would be happy to talk to the president of the verizon and get
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your information -- >> let me come back to that i wanto get issue exactly who was in charge of this project because, you're now blaming it on the contractors and saying it is verizon's fault. so let me ask you this. did you ever look at outsourcing the role of the system integrator and, obviously you did not, from the contractors that we had last week? you all, they had several different people, whether it was you or gary cohen or michelle snyder or henry child they thought who were in charge. so who is responsible for overseeing this project? is it you or your designee? >> let me be clear, i'm not pointing fingers at verizon. i'm trying to explain the way the site operates. we own the site. the site had serious problems. >> who was in charge, madam secretary? >> the person now in charge as integrator is qssi, one of our -- >> who was in charge as it was
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being built? >> -- was in charge -- >> at that team, who is the individual -- >> michelle snyder. >> mesh shed snyder is the one responsible for this debacle? >> well, excuse me, congresswoman, michelle snyder is not responsible for the debacle. hold me accountable for the debacle. i'm responsible. >> thank you. i yield back. >> chair would recognize mr. ding gell from the great state of michigan. >> thank you for your courtesy. i have a few questions i will be asking on behalf of congresswoman shea-porter. i do that by writing. i ask unanimous consent to be permitted to revise and extend my remarks? >> without objection. >> mr. chairman, i would like to begin by thawing you welcoming to the secretary into a room her distinguished father, former governor of ohio served for so many years. i begin my questions by quoting from an expert for whom i have enormous respect. he said as follows, as i mentioned earlier the new
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benefits and its implementation are hardly perfect. rather than trying to scare and confuse seniors, i would hope that we can work together as we go through the implementation phase to find out what is wrong with the program and if we can make some changes to fix it. let us do it and let us do it in a bipartisan fashion. it is too big a program and it is too important to too many people to do that but having said that, it does appear it is working. let us you know and not keep beating a dead horse. my beloved friend, mr. barton, who, i think gave us the beginning of our efforts today. madam secretary, i have seen reports that consumers receiving plan cancellation notices from their insurance companies saying that plans are no longer available. does the aca require insurance companies to discontinue the plans that people had when the law was passed, yes or no?
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>> not when the law was passed, if the plans have not changed, no, sir, that is the grandfather clause. >> that is because plans existed that prior to the passage of law are grandfathered in as you have said? >> that's correct. >> if a insurance is no longer a certain plan is because that insurance made a decision to change their policies, and that caused them to take away the grandfather status from their insurance purchasers, is that right? >> that is correct. >> madam secretary, i want you to submit for the record a statement of what it is we can do about insurance companies that running around canceling the policies of their people. and i don't have time to get the answer but, i want to get a very clear statement from you as to what you can do so we can take some skin off sop folks that have it coming. now, ma'am secretary -- madam
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secretary, my understanding that these decisions of a business character are most common in the individual insurance market and much turn over already exists and existed require to the enactment of legislation. >> that's correct. >> is that correct? >> yes, sir. >> is it correct that 35 to 67% of the enrollees in the individual market leave their plans after one year for different reasons? >> a third or and or about less than six months in the individual market and over 50% are in for less than a year, yes, sir. >> now in the cancellation letters, which move around from the insurance companies, some insurance companies that are suggesting an alternative plan at a higher price. do they have the right to do that? >> well they have a right to do that, sir, but consumers have a right to shop anywhere to compare plans and they have choices now that they have never had before, and some financial assistance and -- >> and they have no right to enforce that demand on insurance
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companies? >> nobody is rolled over into a plan. in fact individuals for the first time ever will have the ability to compare plans, to shop, and to make a choice inside or outside the marketplace. >> looks to me like the insurance companies are trying to inflict on their customers the view that this is their right and that this is the only option available to them, is that correct? >> well i, i think that insurance companies would like to keep their customers, having said that, customers for the first time have a lot of choices because they can't be locked out of coverage. >> insurance companies have no right to enforce that view on the customer? >> there is no rule that says you have to stay with your company or you have to be rolled over -- >> gentleman's time expired. >> when they come forward and tell you that you've got to buy a particular policy, is that right. >> absolutely. >> gentleman's time has expired. chair would recognize the gentleman from texas, mr. barton. >> thank you, mr. chairman. before i ask my questions, we have a former member of the committee on the democrat side
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from the great state of kansas in audience, mr. slattery. we're glad to have you, madam secretary, we're glad to have you, too. >> thank you, sir. >> there is a famous movie called the "wizard of oz", and in the "wizard of oz", there is a great line, dorothy, at some point in the movie turns to her little dog toto, says, toto, we're not in kansas anymore. well, madam secretary, while you're from kansas and we're not in kansas anymore. some would say we're actually in the "wizard of oz" land given the parallel universes we appear to be habit tating. mr. waxman and most of those on the democrat side things are great. you apparently, although you did apologize and you have said it is a debacle you also seem to think that the affordable care act is great. while myself and others, have a different view. ultimately the american people
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will decide. now last week, when the contractors were here i focused my attention on the apparent lack of privacy in the website. if we'll put up the first slide that i had last week. if we can. this is when is public, madam secretary and it's basically a disclaimer that said any unauthorize attempt to up load information or change information on the website is prohibited. it really doesn't say anything about privacy but you do have to accept that in order to go forward with the application. the next slide shows what's not public. this is in the source code. we tried to determine this morning if it was still in the source code but has been pointed out the website's down. this is much more, what i would say frightening to me, it says, you have no reasonable
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expectation of privacy regarding any communication or data transiting or data stored on the information system at anytime and for any lawful government purpose the government may monitor, intercept, search and seize any communication or data transiting or stored on the information system, any communication or data transiting or stored on this information system, may be disclosed or used for any lawful government purpose. cheryl campbell of cgi federal said she was aware of it but said it wasn't her responsible r possibility to put that in the source code. were you aware of it and was it your responsibility to put this in the source code? >> mr. barton, i did not put things in the source code. i can tell you it is my understanding that that is, boilerplate language that should not have been in this particular contract because there are the highest security standards are in place and people have every right to expect privacy.ll righe
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we could check this was still there. you're given almost unlimited authority under the affordable care act to administer it. will you commit to the committee and to the american people that one, you do want to protect their privacy, and two, you will take this out, fix it, make sure that it down have bearing on people that try to apply through the website? >> yes, sir. and we have had those discussions with cgi and it is underway. i do absolutely commit to protecting the privacy of the american public and we have asked them to rye move that statement. it is there in error. it needs to be taken down and we should be held accountable for protecting privacy. >> well, thank you, madam secretary. i sincerely appreciate that and i'm sure the american people do too. my last question or really a comment, i introduced hr 3348 which says, let's make this system voluntary for the first year since we're having so many
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problems and let the american people decide. what that means is, if people choose not to participate, they will not be charged the penalty for non-participation. would you support such a reasonable approach to this while we work out the problems in the system? >> no, sir. >> okay. well that is honest answer. >> gentleman's time is expired. >> thank thank you, madam secre. >> chair recognize the gentleman from new jersey, mr. pallone. >> thank you, mr. chairman. i know we're not in kansas but i do believe increasingly we're in oz because i what i see here so, this "wizard of oz" comment by my colleague from texas i think is particularly appropoe given what we hear on the other side of the aisle. i don't know how you keep your cool, madam secretary, with this continuous effort on the part of the gop to sabotage the aca, to scare people, and bring up red herrings and i think that this privacy issue was another red herring and i'm going to ask you a question about that.
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but before that, and i wanted to say this whole idea being brought up today that somehow, you know, policies are being canceled and people don't have alternatives, is just another red herring. what i think my colleagues on the other side forget this is not socialized medicine. this is in fact private insurance in a competitive market. and if i'm an insurance company and all of you sudden everyone else is selling a better policy with better benefits at a lower price, i can't continue to sell a lousy, skeletal policy that doesn't provide benefits and cost more because i will be out of the market. so that is what is happening here. insurance companies are canceling lousy policies with high prices because they can't compete. and that is what is going to happen when you have a private insurance market which is what we have hear. we don't have a government controlled system. we have private markets. so just wanted to make that point. i have to drill down on what mr. barton said here.
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before reform the individual insurance market was dysfunctional, premiums would shoot up if people got sick. their coverage could be canceled if they had a preexisting condition, and they did not have secure, quality coverage. now i have heard my republican colleagues say patient health information will be at risk in this application process, and this is flat-out false. in fact the a-ca makes a giant leap forward for pro-teching health information by taking it completely out of the insurance application process, by bang discrimination based on preexisting conditions. mr. barton again is, you know, raising this red herring just like the cancellation of insurance, by talking about privacy, but madam secretary, prior to the aca when people applied to insurance coverage did insures make them provide long detailed invasive histories because the law bans discrimination based on preexisting conditions that the individuals will not have to provide in their applications?
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regardless of this clause, please comment on the privacy issue and why it is irrelevant. >> well, mr. pallone in the past any individual american who was in an employer-based coverage, in government coverage like the ones we enjoy in medicare, in medicaid, and in the va, a whole variety of plans, that's about 95% of insured americans, had no medical underwriting. had group protections, had consumer protections. the people who were outside that consumer-protected space were individuals buying their own coverage in an individual market. medical underwriting, demanding health records and often going through extensive doctor interviews and getting health records was a standard for that market. pricing could vary widely depending on gender, depending on health condition. people could be denied coverage and were frequently. that's the market that is currently being reformed with
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consumer protections. if a person had a policy in place in march of 2010 like that policy and the insurance company made no changes to disadvantage the consumer, those policies are in place, you keep your plan, you like it and that goes on. for the people who though had a medically underwritten policy, were paying more than their neighbor because they happened to be female, could not get their health condition for a fixed -- written, they will have a new day in very competitive market. 25% of the insure remembers brand new to the market and they ever r offer competitive plans. >> mr. chairman, could i just ask that the document -- >> put it in the record, without objection. >> thank you. >> chair would recognize mr. hall. >> thank you, mr. chairman. mr., madam secretary, i think congresswoman blackburn asked you about the federal government, how much they spent today and, they're spending some
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mon as we speak, aren't they? it is down right now, isn't it? are you, are you projected ongoing problems? >> i'm sorry, sir, i'm having a hard time hearing. what was the -- >> she asked you how much had been spent today and i'm asking what you expect to pay in addition to the repairs that the website will require and requiring them as we speak here? so those are things you projected you knew they would happen and they will happen but you surely looked ahead and you have some estimate what is going to happen? >> yes, sir. >> and going to cost? >> for our two major contractors who are qssi, subsidiary of united, and for cgi there are obligated amounts. for cgi who is in charge of the entire application, there has
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been $197 million obligated and that is to last through march of 2014 and as i said before about $104 million has been expended in that obligated amount. >> i'm going to try to be here in 2014 to be sure that your testimony is correct, okay? i'm just -- i'm just joking with you. i hope -- >> okay. >> and were you born in kansas, meade, kansas? >> i was not. i was born in cincinnati, ohio. i married a kansan and went to kansas. >> i was in the third grade there and i thought i saw you on a tricycle there one day. [laughing] >> well, well, it was an illusion. >> let me ask you a question, have you ever reject ad financial bill from one of the contractors? have you ever? >> have i ever -- >> reject ad financial bill from one of them?
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>> sir, again, i, our -- >> i guess you can say yes or no. >> our accounting office does a routine audit and review of every bill that comes in before they do it. i do not personally. i want to be very accurate, but i don't personally pay contracts, negotiate contracts, by law and by precedent. that is really illegal for someone who isn't a warranted contract officer to engage in the debate or the discussion around federal contracts. >> how much has the administration spent on the exchanges in total, not just healthcare.gov but all of the exchanges? >> i'm sure -- >> how difficult is that figure to give me? if you can't give it to me -- >> i can get it to you in writing very quickly. >> madam secretary, i would like to talk, i don't know how much timofei got left. i like to talk about a couple of businesses in my district struggling how to move forward. one is manufacturing. one is in the pet boarding and training business.
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one as 85 employees. other has 56. here are quotes from recent letters. situation we're in we would have to pay $170,000 in penalties under obamacare. this is another example of the government picking the winners aplosers. we are the losers. there is no way i can be competitive if i have to raise my prices to cover $170,000. here are my options of the do not pay the penalty. raise my prices go out of business. 85 people lose their jobs. layoff 35 employees who don't have to pay the penalty and move more production to this country. reduce 35 jobs. here is quote from the other. since there are high labor, low margin business can not afford to pay for insurance for our employees we're faced with either closing our business, perhaps through bankruptcy, so there are heavy financial obligations that would continue whether we operate or not. firing enough employees to get under 50 employees limits close business. even if we close a location we can not escape many expenses such as rental agreements. what am i supposed to tell these
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people? >> well, sir, i think that in employer market about 95% of all american businesses are exempt from any kind of requirement to cover employer, employee insurance and they are outside the law. they continue to be outside the law but they will have new options for those who want to cover their employees and new tax credit possibilities. for large employers, about 96% of them already cover their employees, and as you know the penalty that your constituents refer to is not a penalty that is imposed in 2014. it is being discussed with businesses about what kind of information is exchanged and it will take place in 2015. >> gentleman's time. >> will use the gavel on me if you don't hush. i yield back my time. >> gentleman's time expired. chair recognize the gentlelady from california, miss eshoo.
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>> thank you, mr. chairman. welcome, madam secretary. you're a distinguished woman. you have distinguished yourself and your state, the offices that you've held and now working for the american people and i salute you for it. i want to really congratulate my republican pals for being absolutely, 1,000% consistent. you love what's wrong with the website and you detest what's working in the affordable care act. and i think that is on full display here. but let's get back to the website because that is what the hearing is about. it's my understanding that november 31st is the, is a hard date for having everything up and running. do you have, now, hhs did testify in september that they
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were 100% confident that the site would be launched and fully functional on time on october 1st. that didn't work. do you have full confidence in this new hard date? >> congresswoman, i can tell thaw the assessment that we have made is that it will take until the indof november for an optimally functioning website. i know that the only way i can restore confidence that we get it right is to get it right. so i, i have confidence but i know that it isn't fair to ask the american public to take our word for it. i've got to fix this problem. and we are underway doing just that. >> but are you confident that, i think i said november 31st, which is -- >> i thought -- >> does not exist. november 30th. you have confidence in november 30th. >> i do. >> is there any penalty to qssi
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or cgi for not delivering on what they promiseed? >> well i think, as you can see we have a obligated fund for a contract. we certainly have not expended all those fund and we expect, not only the cms team but our contractor partners to fulfill their obligations -- >> if they fail to fulfill their obligations, i don't know what's in the contract. is there a penalty? >> there isn't a built-in penalty but i can tell thaw paying for work that isn't complete is not something that we will do. qssi as you know has taken on a new role as integrate tore of the hub that they built and have in operation is extremely well, not only for the federal exchanges but for all the state-based markets are using the hub and that's why we had confidence in their ability to actually take this next role-on
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and coordinate the activities moving forward which has to be driven with a very clear set of outcomes, very accountable timelines, and deadlines, and they will be helping to manage that process. >> on the issue of security, there was a security breach that arose recently, that i read about, at any rate. and, what i think is very important here because the issue of privacy has been raised and i think that has been answered. because very importantly, there isn't any health information in these systems but there is financial information. so my question to you is, has the security wall been built, and are you confident that it is there, and that it will actually secure the financial information that applicants, have to
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disclose? >> yes, ma'am, i would tell thaw there was not a breach. there was a blog by a, sort of skilled hacker that if a certain series of incidents occurred you could possibly get in and obtain somebody's personally identifiable. >> isn't that telling? isn't that telling? >> we immediately corrected that problem. so there wasn't, it was a theoretical problem that was immediately fixed. i would tell you we are storing the minimum amount of data because we think that's very important. the hub is not a data collecttor. it is actually using data centers at the irs, at homeland security, at social security, to verify information but it stores none of that data. so we -- >> thank you. >> we don't want to be -- >> gentlelady's time has expired. the chair recognizes mr. shimkus. >> thank you, mr. chairman. welcome, madam secretary. madam secretary before i start my questions "the washington post" gave the administration and the president, yourself,
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four pin nokia yes, sir on whole debate if you like the insurance you have you can keep it. -- pinnochios. would you recommend to the president that i stop using that term? wouldn't that be helpful in this debate? >> well, sir i think he used at time the law was passed and -- >> as of september 26th, also. >> that is why we -- >> so the answer is you don't, you don't believe that wash upon post -- >> we'll hand this down to you so you can see it. have you ever shopped, i know you have, but this is for a at a grocery store with a coupon? >> yes. >> have you ever used a coupon? >> yes. so the coupon gives you the terms and conditions when you go to the checkout to get whatever's off the price of the goods. when you all added the see plans now option, you in essence gave the searcher in essence a coupon based upon what they're seeing,
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there desire was let the people know what the prices. however as the news reported and i followed up on last week's hearing, was that if you are under 50 years old, you get quoted the price of someone who is 27. if you're older than, if you're older than 50, could be 64, you get quote ad price of someone who is 50 years old. isn't that misleading? >> well, sir the learn side of the website which has been up since actually -- >> that's truthful then? if you quote a price -- >> it is clearly a hypothetical situation. >> wait, on the see plans now option, are you saying this is a hypothetical? that is not what it says on the site. it says, this is the price when you put in your age. if your age is 49, it quotes you as if you're 27. >> sir, the only way someone can
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get an accurate information about their price is to get their -- >> let me ask you another question, when did you decide to use this, the below 50, at 27, 50, at 50 years old? when did you make that decision? >> that was decided by the team -- >> by who? who made the, the problem with this whole debate is, y'all won't tell us who made the decision. >> i can tell you i did not design -- >> so who? >> i will get -- >> who made the decision on the 27-year-old quote for someone who is 50? >> i just said i will get thaw information. >> thank you. let me go to, because it is misleading, and the white house insists it didn't mislead the public, and -- find out you did. let me finish on this debate, transparency issue. if someone, a constituent of mine or someone in this country has strongly-held pro-life
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views,. >> here we go. >> can you commit to us to make sure that the federal exchanges that offer that is clearly identified and so people can understand if they're going to buy a policy that has abortion coverage or not? because right now, you can not make that determination. >> sir, i don't know. i, i know exactly the issue you're talking about. i will check and make sure that is clearly identifiable. >> here's our request. can you provide for the committee the list of insurers in the federal exchange who do not offer as part of their package abortion coverage? >> i think we can do that, sir. >> should be able to do it. >> i just said -- >> no, you said if we can do that. >> i think we can do it. >> i think or i know we can do it? >> sir, i can't tell you what i don't know firmly right now. i know that it is the plan.
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i will get that information to you. >> gentleman's time has expired. chair recognizes mr. engel from new york. >> thank you, mr. chairman, madam secretary. i appreciate you coming here today to answer questions about the affordable health care act. you know my republican colleagues actions here remind me of a story i read when i was a little boy and that is the story of chicken little. who ran around yelling the sky is falling, the sky is falling. unlike "chicken little", my republican colleagues are rooting for the sky to fall. republicans are holding this hearing today under the auspice of an investigative hearing. as if they want to get to the bottom of what went wrong with the website in order to help fix it but i don't think, madam secretary, there is one person in this room who is naive enough to actually think that the republicans want to see this law work. they voted over 40 times to repeal the law. they shut down the government and threatened to force a default in order to stop it. they're rooting for failure.
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madam secretary, can you tell us what would be the impact on american's health insurance if republicans lad been successful in their efforts to defund or repeal the affordable care act? >> i think estimates by the congressional budget office would increase deficit by 110 billion doors lars in the first decade and close to a trillion dollars in the second decade. we have 42 or 43 million americans without health insurance at you will. some medicaid eligible and some in over the medicaid he will babble. -- eligibility. 30 pubs and democrats governors shared their support moving ahead with medicaid expansion. absent the affordable care act those folk would be without any health security. in the private market what we know it takes a real toll. what i say the biggest issue is not just the financial toll, not
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the community toll and country toll which is significant. i have a good friend that runs the cancer center at the university of cans ses. i was with him and cancer researchers recently. he said if you get a cancer diagnosis you are 60% more likely to live five years and beyond if you have insurance than if you don't. we worked in groups that can help the effort spreading of misinformation about the cost of coverage. to dissuade the uninsured for seeking coverage. madam secretary, how are these tactics impacted their ability
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to impact the affordable care act? >secretary sebelius: there is no question a lot of people need a lot of information. that is why we have had business sites trying to visit the site. that is why i'm so frustrated and disappointed the site is not functional and i'm trying to get it functional is clearly there is a demand. we need to get information to people about the law. this is not any longer a debate. it is a law passed by both houses of congress and signed by the president of the united states. the president was reelected. it is the law and people have benefits and rights under that law. we need the information so they can make choices for themselves and their families. >> thank you. it is the law and i find it disconcerting my republican colleagues have done nothing but root for this lot to fail for the last 3.5 years. now there is a big show here of being upset at problems with the
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website of keeping people from signing up for coverage fast enough. i would just say to my colleagues on the other side of the aisle, you're really on the wrong side of history here. website will be fixed and millions of americans will be able to get quality affordable health insurance coverage through the affordable care act. again, i thank you for being here today, madam. >> chairman of the health committee be at >> thank you. welcome, madam secretary. have you personally tried to register or enroll on the website? secretary sebelius: sir, i created an early account so i would see the problems that were coming to people who were interested. i did work my way through the application feature early on, but frankly i have affordable health care. >> i wondered if you had been so the process millions of americans have gone through. madam secretary, the initial website crashes appear to be largely a result of the decision
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to prevent browsing of the plans. cgi federal testified at our here last week they had designed the website to allow users to browse and compare plans before having to create an account. ms. campbell told us two weeks prior to the october 1 launch, they were told to turn off the browsing future. were you aware in september this decision was made? secretary sebelius: sir, wasn't not aware of that decision made. we were having some features not to put additional risk on the website. >> at who made that decision? secretary sebelius: administrator made that decision. >> and the you know that was made? secretary sebelius: yes, sir. we were anxious to get the website up and running and functional, which we clearly have failed to do. although i would suggest the website has never crashed, it is
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functional but at a very slow speed and very low reliability and continued to function. they tear down some of the features feeling it would be better to load them in later. one was the shop and browse feature, another was the spanish version of the website and the medicaid transfers. all three of those issues were pared down in september to not overload the system. >> thank you. last week cgi federal testified responsible for end to end testing, and they said months of testing would have been preferable to two weeks. do you believe two weeks with enough time to complete testing of the entire system? sebelius: clearly not. >> when were you made aware of the results of the test, particularly collapsing with a few hundred users? sebelius: leading up to the october 1 date, we had regular
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meetings with not only a team, but administrators involved. i was made aware we were testing as we found problems, we were testing problems. there is a cgi report mid august identifying some problems. between august and september that was the function of cgi to fix those problems, that is why you test. >> in the "washington post" october 21 there was an article that said about a month before the exchange opened a testing group of 10 insurers urged officials not to launch the site because it was riddled with problems. were you aware in september they requested a delay in the exchange? sebelius: i was not aware they requested a delay. everyone was concerned there were risks and likely to be problems with a brand-new integrated insurance system. i don't think anyone ever estimated the degree to which we
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have had problems in the system and certainly the contracting partners did not. >> and did hss respond to the recommendations? sebelius: i was not in the meeting, i don't know who they talk to. i will get back to you. >> thank you. thank you, mr. chairman. >> mr. green. >> madam secretary, thank you for taking time to be here today. i represent parts of east and north houston harris county. our district has one of the highest uninsured rates in the country. even worse we have one of the highest rates of people who have jobs but don't receive insurance through their employer. it's for this reason i believe houston would be a good place for you to come spend spread the word about the benefits of the affordable care. we learned are unable to attend because of scheduling conflicts and i hope we can have an agreement sometime in the future you will come to the fourth-largest city probably the highest number of uninsured in
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the metropolitan. we have some of the highest uninsured in the country. it's important to me and our constituents to get it right, and that's why i share the disappointment the website is not working as planned. november 30 is not soon enough we had me and my constituents have been waiting for years to purchase health insurance and we owe it to them to get the marketplace is up and running. the contractors have not served our country well and should fix it and not have to pay. now we're hearing about the cancellation being sent by insurance companies notify them of their plans no longer offered. for these americans losing their health care coverage because of the affordable care act or is it because these plans were changed at the enactment of the act? sebelius: i would say it is the latter, sir. if the plan was in place, no one would have received the cancellation. >> if somebody had an insurance plan before the act, the
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president was correct. if you like what you have, you can keep it. the plans were changed so now they have to comply with the new law? sebelius: they can choose to be grandfathered and keep the same plan with means the same benefits and the regulation allows insurance companies to charge medical inflation plus the trendline so they did not have to charge the same price, they could increase it, increase co-pay, coinsurance. what they cannot do is cancel benefits that the policyholder relied on. they could not disadvantage the policyholder. if the plan is in effect, absolutely it is still in effect. >> some of the millions of letters we're hearing about are probably because the plans change. sebelius: absolutely be at end of individual market plans change every year. >> even in a small business market that happens. these plans are not allowed now because they're completely inaccurate. they do not offer the minimum essential benefits. is that correct?
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sebelius: that is correct. >> having been a state legislature and as governor in kansas, i'm sure every state has minimum mandated benefits they have to have with their health plan. sebelius: they do. it applies again, sir, to the group market where 90% of covered americans get their policies. this market has always been the wild west. >> americans received those letters about cancellations. they are eligible to purchase plans on exchange? sebelius: or out of the exchange. they can go outside the exchange, inside the exchange. their insurers can offer them plans. they have choices they'v it nevd before. >> 80% of their premium dollars will come back. >sebelius: that's true. >> note is not in texas, but i don't know any state that has 80% requirement. sebelius: no state has it, i would suggest, not broad base
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before the affordable care act. >> let me give an example of a case worker, providing $25,000 maximum benefit for their employees. most employees didn't know it. until one constituents found out she had cancer. the bill ended up being $300,000. and so that's some of those plans that are not being allowed to be sold now, is that correct? sebelius: not only with the plan have a limit on out-of-pocket cost on the year, but lifetime, and it will have take away the notion that you would run out of your coverage in the middle of a treatment, which a lot of plans do. >> i know i'm out of my time but it is like buying a car, if it doesn't have a motor, it is no good to have that car. >> gentlemen, the time has expired. >> thank you very much, mr. chairman.
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madam secretary, we are glad to you before the committee. it is important we get it right. i hope you can appreciate we are trying to what we missed along the way. and one of the things that bothered me was the letter that was sent from your agency to the gao on june 6. we're in the final stages of finalizing testing the it infrastructure, it will support the application roman process. hss is extremely confident that october won the marketplace will open on schedule and millions of americans love access to affordable quality health insurance. i'm just an average guy fo froma small town in oregon. when i read that, tells me you believe everything was good to go, the testing was in place and we should have full confidence everything would work. correct? sebelius: that is a letter i signed, yes. >> signed by your assistance. i went into this bleeding your
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response, your agency's response to gao everything was ready to go, we should have full confidence. when somebody says extremely confident, tells me you are extremely confident. when we had a test my from the witnesses last week i asked them about the testing and what the industry-standard would be and they said it really should have been months we had especially for a project of this magnitude and yet we hard it was only two weeks. in august cgi said on august 9 was not enough time in the scheduled to conduct adequate schedule testing. did that make its way all the way to you? and do you think there was adequate time? sebelius: sir, clearly as i have said before, we did not adequately do and to and testing. products were not locked and loaded into the system until the third week in september.
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each of the component parts was tested and validated independently. >> all of those worked though, right? they told us individual modules were tested and met specification. you concur with that analysis? sebelius: i do concur with the testing that was done, yes. >> literally was the end to end. which some thought we should delay to avoid this collapse that is now upon us. the second piece gets back to the position imposed, you haven't had a chance to read this morning but the president repeatedly saying if you have a plan, you will keep your plan. all of us made this even if they make minor changes, but your own rules are written said no, that isn't really what is going to happen. minor changes are made, that means the plan changed that means you don't get it.
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sebelius: well, sir, that isn't true. the rules didn't say what you just suggested. and i think the estimates given that there would be turnover in the market was really an outside projection. it wasn't our rules. was a snapshot of what happens in the market. plans changed so dramatically over time that the estimate was they wouldn't be -- not because of ourof insurance companies, businesses. >> you set up those market rules looking like they had to comply with, correct? sebelius: the only if they chose not to grandfather the policies. >> that meant they could make any change be at sebelius: any grandfather policy in place would still be in place. >> but if they made any change. >> they could make changes in pricing, in benefits. they could not be medically disadvantaged the consumer, but they could have trendlines. they had a wide corridor to make sure that a similar plans of a consumer liked the plan, the
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plan if it stayed. >> here supply company implication. i have letters all of my district to have gotten letters from their insurers who say because of obamacare, they're no longer going to be in the individual market where police with that plan in individual inl market, and the result is paying $600 per month for $3000 adaptable, now it cost me $800 per month for a $5000 deductible. a woman whose job she had 40 hours now down to 29 as health insurance or nothing to live on her own because of the way this loss could implement it. i realize my time. >> from colorado. >> thank you very much, mr. chairman. and thank you secretary for being with us today. i want to follow up with a couple of those questions he was asking you about cgi. as you know, chairman issa
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releaserelease a document monthy status report from cgi last night. it looks to me sort of a technical document that has a punch list of outstanding open issues, and some of them to highlight items that seem to be alarming. for example, one of the entry said due to the compressed schedule there is not enough time built into a golf adequate performance testing. this is certainly in retrospect sounds bad. but the day of the document released september 6, and on september 10, 4 days later, cgi came into this committee and testified under oath "cgi federal is confident it will deliver the functionality that cms has directed." i am trying to figure out how cgi is now coming in and saying you know, we warned everybody this wasn't going to be ready
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when they came in and directly told me they would be ready to launch on october 1. so it kind of raises a question. how it can be reconciled. one destination is cgi was lying to this committee. i think that's unlikely. another is cgi thought the items flight in the report were like a punch list that could be addressed. so here's my question to you, madam secretary. was cgi telling your department the same thing that they told the committee on september 10 that the company was confident that his programs would be ready? >> congresswoman, all of the contractors testified here in september and again last week before this committee, and the testimony was fairly similar that they were ready to go in september. they were asked last week if they had suggested we should
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delay the launch date, each of them said no. >> 's been never asked you to delay the launch date? sebelius: they did not. and i do not think it is valuable at this point to do a lot of pointing blame, fixing the blame. what i want to do is fix the problem. >> and so do i be at sebelius: we will report back regularly. >> we are relying on the contractors to fix it. so that goes to my last question, which is they have now come in and says the site is going to be functional for the vast majority of users by the end of november. is that right? sebelius: that's correct. >> given what cgi told us and the other vendors, do you believe that is correct? do you believe it will be pretty much ready to go by the end of november? sebelius: i do. we're making improvements each
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and every day. it is easier to use now that was two weeks ago. it was way from where we needed to be. >> it is not like it will all be fined by the end of november. it is beginning to improve already. sebelius: it is a continuous process a has websites are. patches and fixes are made on an ongoing basis. as we find issues, we are fixing them in real-time. >> and you're going to guarantee, yes or no, people will have privacy when they go on this. sebelius: absolutely. >> i was on the washington journal program where the colors call in this morning and i had a man, max, colin. he said he got one of those letters from insurance company that his insurance was canceled. he went on to the website and under the federal exchange and he found a better plan and now he's going to sign up. so i would hope that is what everybody would be able to do. and i thank you, mr. chairman.
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>> thank you, mr. chairman. i am pleased to hear the website will be fully operational by the end of november. would you come back to our committee so we can see if that's actually accomplished and how it was accomplished? sebelius: i will make every effort to do that. >> okay. you were governor and state insurance commissioner in kans kansas, and i reached out to our state insurance commissioner and governor, and i found out they have absolutely no data about nebraskans who have either tried to enroll or enrolled. nebraska's one of the states that opted not to do their own exchange and rely on the federal exchange. so is interesting to me that neither our insurance commissioner nor the governor's office had any data about
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nebraskans and enrolling in these plans. i also asked the insurance commissioner if any of the navigators, if they knew the navigator and if they had to apply to be certified or licensed in essence like an insurance agent would be. they told me they have no clue who has been authorized by hhs to be working with nebraskans. so this is concerning to me. so i'm going to ask you a few questions along this line. first of all, do you have data on how many people in general in the united states have tried to enroll and apply through this website? sebelius: no, sir. we don't have any reliable data around enrollments, which is why we haven't given it to date. >> or have any data on how many
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people have tried to enroll, but because of the problems have not been able to? sebelius: no, sir. i met with insurance last week. one of the priority fixes was the 834 that document that sends an individual's name to a company and verifies it, that is one of the systems that is in place. >> i appreciate that. the contractors i asked specifically about the information of how many people have tried to enroll and enroll, they said they do have that number, but they can't tell us that because of a contract with hhs saying they are gag on that information. sebelius: i would suggest the numbers are not reliable. >> i tell you what, my question will be will you on the record right now authorize them to give us those numbers and let us determine whether those are reliable? sebelius: no, sir be at and
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wants to give you reliable confirmed data from every state and from the federal marketplace. we have said we will do that on a monthly basis by the middle of the month. you will have that data, but i don't want to turn over anything that is not confirmed and reliable. >> but that data out there exists. sebelius: i would tell you right now it is not reliable data according to the insurance companies who are eager to have customers, they are not getting reliable data all the way through the system b. >> the number of people who have clicked on it, tries to enroll. i'm not asking about what they enrolled in or if they came in and said they were 65 and they were 27 years old. that should be a pretty reliable number. sebelius: the system isn't functioning, so we are not getting that reliable data. insurers met with so that is the case.
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>> reliability of that status certainly flies in the face of the testimony from the contractors. i yield back. >> thank you, mr. chairman. thank you, secretary sebelius for your presence here today and your testimony. i am frustrated with the broad rollout, i appreciate your long-standing commitment to improve the health care options for all americans and fixing this website clearly. i think it is important to note in my home state of california and other states as well, the new exchange marketplace we call it covered california is working. and rates constituents are finding rates are as much as 9% less than those they found on the marketplace last year. i'm thankful my constituents now have this option, and as i look around to implementation nationwide it seems clear to me that political decision an
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individual states have really made a difference for consumers. the governors and legislatures that embrace this law are delivering for their community. but those who've elected were trying to ignore the opportunity and throw up roadblocks here in congress and at state legislatures should not now seem surprise that there are significant bumps along the way. this seems to me to be completely disingenuous. have embrace the lawson's open enrollment began october 1, californians have started nearly 180,000 applications with more beginning every day. i want to mention the stuff i had last night with those in town hall with my district on the central coast of california. one of the first cause i heard from was a mother from santa barbara. she wanted to tell me the story of her son.
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her son is 28 years old and he had been paying $425 per month for his insurance before the affordable care act. she was happy to report he is already applied through covered california and has found a policy that works better for him and has all the essential health benefits covered with the former policy did not, and now will only cost him $109 per month. this is significant savings, and this is being repeated in california option. there are many residents who have now set up their own websites and marketplaces and they ended up with the people now signing up for coverage and this is semiformal care act is working. over 30,000 people have enrolled. in oregon over 50,000 people have been enrolled. we could go on and on. the success of the state exchanges shows how badly this
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law is wanted and needed, how much it will be to so many people who want quality affordable health care. my three quick questions to you are this, madame speaker, what is your assessment of how this first month has been going in the states that are running their own marketplaces which this congress intended the formal care act works? sebelius: everything we hear from the state-based markets are that they are doing well, i have not submitted data yet. we're working with them on a monthly schedule so they can confirm medicaid data and enrollment data and we will see the real numbers at the end of the month and be sure they are available to the public but everything we hear is that they see the same demand, they are eager to enroll folks and that is going smoothly.
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>> and what do you think this shows both the demand and the interest for constituents? sebelius: i don't think any question despite a series of roadblocks and blockades and a lot of misinformation driven by about $400 million marketing campaign last year, americans are eager to see what their benefits may be under the law, what'what their opportunities a, how to get health security for themselves and their families. and we want to make sure they see those benefits. the website is one of the ways to do that. the call center on the ground enrollment personal outreach are a variety of ways, and i would tell your colleagues, mr. congressman, i would be happy to get you the list of the nebraska folks who are on the ground. it is available easily, it is public record so i would be happy to send it to you so you could share it with your insurance commissioner and governor. >> the time had expired.
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chairman from the great state of wisconsin, chairman rogers. >> thank you for being here to answer some questions if i can. is it your testimony that every night to try and increase the functionality of the system, is it between two and four write new code and put it into the system? sebelius: clearly i am not hot swapping code. >> you are in charge of the operation that hot swaps code, you're trying to improve functionality, that happens every night? sebelius: no, don't think it has happened every night. it happens periodically between hours of one and five but it is not innately feature. >> has each piece of that code been security tested? sebelius: that is my understanding. >> each piece of that code has been tested, yes or no? sebelius: i don't know. >> that is a much safer answer, trust me. sebelius: it is an ongoing
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operation and as code is loaded, you need to retest over and over and over again. >> you need to test the code. has any end to end testing been done since it went live? yes or no? sebelius: my understanding is there is continuous testing. >> yes or no, has an end to end on healthcare.gov gone live, yes or no? sebelius: i will find out exactly what testing they are doing. i know they're doing simultaneous testing as new code is loaded. >> are there any end to end tests run after every new piece of code is put in this? i'm talking about a end to end test covers the cost. i can tell you they are not and would be interested to hear why not. if you go to tab two in your book, you have a tab.
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if you go to tab two right there. dated september 27, and it is to maryland. let me just read a couple of pieces here. there are inherent security risks with not having all protested in a single environment. the system requires rapid development and release of hot fixes and patches so it is not easily available or stable during the duration of the testing. secondly the security contractor has not been able to test all the security controls in one complete version of the system. and if you look in the first part which is most troubling of all, it says due to system readiness issues, the security control assessment was only partly completed. this constitutes a risk that must be accepted before the marketplace day one operations. and so let me tell you what you did. you allowed the system to go forward with no encryption on
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backup systems. they have no encryption on certain boundary crossings. you accepted a risk on behalf of every user of this computer that put their personal financial information at risk because you did not even have the most basic end-to-end test on security of this system. amazon would never do this. proflowers would never do this. kayak would never do this. this is completely an unacceptable level of security. and here's the scary part. we found out after the contractors last week that an end-to-end test has not been conducted on security, not functionality, because if it is not functioning, you know it is not secure. your ongoing hot patches without end-to-end test. the contractors told us it would take a very thorough two months just for an integrated end-to-end security test that i will tell you has not happened today. why?
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because you are constantly adding new code every night to protect the functionality of the system. you have exposed millions of americans because you all according to your memo believe it was an acceptable risk. don't you think you have the obligation to tell the american people that we are going to you in this system, but beware, your information is likely to be vulnerable? would you commit today, secretary, to shut down the system and do an end-to-end test? sebelius: no, sir. if you read the memo, the testing of interface testing daily, weekly scans are going on. this is a temporary-- >> that is not what the memo says number one. and the contractors will tell you. >> mr. chairman, point of order. i think the witness ought to be able to answer what was a speech by the collie because he raise a lot of issues.
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>> were there no other speeches here today? that is shocking. >> does the secretary wis which respond briefly? sebelius: i would say this document is a document signed by the commissioner which discusses mitigation strategies for securities which are ongoing and upgraded and an authorization to operate on a permanent basis will not be signed until the mitigation strategies are satisfied. it is underway right now, but daily and weekly monitoring and testing is underway. >> mr. chairman, there are people using this system today and she just admitted again it is not secure. >> she did not say it. >> the gentleman's time has expired. mr. doyle. >> madam secretary, welcome. those of us who fought for this law and voted for this law have a vested interest in its success
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and the concerns that you hear expressed on this side of the panel are real because w he wans to see americans get health care. i think it's somewhat disingenuous for my colleagues on the other side of the podium here to have this faux anger and this faux concern over a bill that they absolutely want to fail and have rooted for its failure and have voted over 40 sometimes to repeal this bill never putting an alternative plan on the floor for the american people but just simply say this plan doesn't succeed. i think they're real fear is the plan will succeed and the american people will learn the real benefits of this plan, not the propaganda campaign that has gone on by the republicans for the last three years. madam secretary, i think one of the keys to the success of this plan is we get young people to enroll in this plan.
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and i have some questions about some enrollment concerns that i have. i understand yo is that a presey 700,000 people have applied for coverage via the healthcare.gov and the state exchanges. sebelius: they completed an application. >> which is different from enrollment. sebelius: that's correct. >> are you expecting, no you don't have exact numbers yet, but are you expecting a large number or small month enrollments? what are your thoughts on that? sebelius: our projections prior to launch were always that there would be a very small number at the beginning. we watched the massachusetts trend which started slowly and build. given our flaws launch of healthcare.gov it will be a very small number. >> in the massachusetts plan it was 123 people signed up. less than 1% of the overall first year enrollment in the first month. we saw the same kind of numbers in medicare part d the first part of open enrollment back in
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2006. madam secretary, young americans are the most likely age group to be uninsured, and a lot of us are concerned that because of the problems that we've been having with the website that a lot of these young folks may not come back on. they have very short attention spans. i have four kids who all work on the internet. if they cannot get something in five minutes, they are onto something else. what plans are in place for your department to encourage young people to go back and revisit the site and make sure that we're getting young people looking at that site and accessing it. sebelius: step number one is fixed the site because we don't want people to be invited back and then have a bad experience the second time around. the site is particularly important. tech savvy younger generation, folks who we need to enroll, i think that we have so fixing the
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site is step one. step number two is getting information to folks the law even exists. a lot of young people haven't followed this dialogue for the last three and a half years. >> we need a real marketing campaign and we need to reach out to young people, especially the end of november and you say this site will be working a lot better, to make sure they are checking that. one of my four kids is self-employed, 33 years old, paying $140 per month for a blue cross plan. eligible for subsidy. we browsed that site. he can get coverage for half of what he is paying right now. that is good news for us because i think my wife is paying his premiums so we will save the money. we had to prod him to go on that site and enroll. for a lot of young people they are not going to do it unless it is easy. it is important we get that fixed. sebelius: i agree. >> dr. murphy, chairman of the oversight committee.
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>> thank you, madam secretary, and welcome. you had mentioned that the people, the people who do the technology on the website made the mistakes you mentioned. when we had them before our committee last week they said it was not their fault, but hhs there were some problems there. sebelius: they were not involved in the website. >> the data, i understand. but they had a role, cgi had a role, other companies, et cetera. i'm curious, what decisions did you make that affected this for better or worse in terms of the data, the easily problems and being able to track how many people are actually enrolled. sebelius: my decisions specifically to design the website. i was not involved. i am prohibited to choose contractors, we go by the federal procurement and i got written reports on exactly what
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was done. >> what about the report about getting data in, how many people are enrolled. did you have any hand that process? sebelius: application process at this point does not work end-to-end very well and we do not have reliable data. >> if you had asked them to say i am in charge of this, i want a regular report, people have tried to enroll, did you ask that question fo? sebelius: we have prioritized for specific contractors. insurance companies are eager for us to get reliable data. that is not there yet. >> i appreciate that. i just wonder if you told them that was part of the plan. we are hearing from thousands of people that the policy is canceled. i heard from one in pittsburgh that just canceled 30,000 individual policies. they said they expect 50,000 50,000-30,000 to enroll in exchange plans. so far the number of people who have signed up for their plan is
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10. 10. i'm concerned a lot of these individuals and families will not be able to make it by january 1. do you know how many families will not be able to keep their insurance by january 1? sebelius: bylaw that has been in place for a while at the state level. insurance companies must give their customers a 90 day notice about a policy change. do have a policy that you will know? people across america. do we know how many policies will be canceled or enrolled? is it 1000, 5 million? >> we know in the individual market and number of the plans being sold are not grandfathered and are not currently meeting the law. those notices have gone out. we know there are about 12 million people in the individual market.
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a number of them have grandfathered plans. which meet the essential health benefit. >> let me put a face on that. paul wrote to me is that i supposedly one of the families this act is supposed to help but it is hurting more and making it harder for my family to live. we will have less money for food and other essential items. i have a wife and four children to take care of. the other person wrote i had a 2013 plan which included the premiums and out of pocket total liability. for 24 to the same program liability is $9000. a single mom wrote i want to convey the thousands of people have an insurance canceled because it does not meet the standards of obamacare. i like my insurance. i specially like the price. now i am being forced to sign up for something that is way more expensive. as a single mom who is self employed, i'm worried of how i can pay the bills. i hope you have a mechanism to track who they are. the cost are going to be driving her down.
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sebelius: i suggest there is no requirement and those consumers sign up for a plan suggested by their company at a higher price. they have no options. health underwriting without pre-existing conditions with some guarantees. >> she is searching around and cannot find a plan she can afford. >> gentleman's time expired. gentleman from north carolina. >> gentleman, before my time begins i have a parliamentary inquiry. mr. chairman, i'm always sensitive to committee coram. i want to ask unanimous consent i can display the democratic twitter handle th. no objection, thank you. secretary madam secretary, thank you very much for coming today. i would like to ask about the documents my republican colleagues have just released. this document is an authority to
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operate memorandum to operate the federally facilitated marketplace for six months and up by the security mitigation plan. this document, as i understand it, describes testing for healthcare.gov. it says security testing of the marketplace was ongoing since its inception and into september this year. in fact, it says "throughout the three rounds of security control assessment testing, all the security controls have been tested on different versions of the system." that's good news. but the bad news is a goes on to say because of system readiness, complete security assessment of all the security controls in one complete version of the system were not tested. this document indicates they postpone a final hearing screening. in its place cms put in place a number of mitigation measures and it concluded these measures would mitigate any security
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risk. the question, are familiar with this document? sebelius: yes, sir. >> is it correct this document recommends implementing a dedicated security team to monitor, track and ensure the mitigation plan activities? sebelius: yes, it does. >> is it correct this document recommends monitoring and performing weekly testing on all border devices including internet facing web servers? sebelius: more than recommended, it is underway. >> is it correct it recommends conducting daily and weekly? sebelius: yes, sir. >> does this document recommend a full test on the marketplace in a stable environment? >> yes, sir be at >> is it correct this document recommends migrating the marketplace to cms data center environment in the first quarter of next year? sebelius: yes, it does. >> understanding is independent security expert is performing
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security testing on the code that powers the website on an ongoing basis, is that correct? sebelius: that is correct. they did an assessment of the system, gave us preliminary report, they are in the process of posting their final report. that did not raise flags of going ahead and the mitigation strategy was put in place to make sure we had a temporary authority to operate in place while the mitigation was going on and then a permanent place to operate will be signed. >> finally, do you have confident in these and other measures are taken to protect the security of americans personal information? sebelius: i do, serbia >> thank you. we believe you. what you are telling us is that these remedial actions and the ongoing security testing are protecting the security of the website. that's a message that it's important for the public to hear. my republican colleagues do not
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want this website to work. i'm convinced of that. they want to block the aca at all cost and shut down the government to stop the law. the last four years they had taken every glitch, every single glitch and pick up and tried to exaggerated significance. and that's happening today. thank you, mr. chairman, i yield back. >> mr. chairman, i want to comment the request also. >> yes, go ahead. >> i would like to request my opening statement which we are not allowed to be given to be made part of the record. and i do have a number of questions, and from constituents i would like be able to slip in those as questions for the record. as the secretary for her attention to those so we can get answers because they are important questions. >> without objection. >> it just came to my attention that on cnn's website the site
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was hacked just last week. i would be happy to make this available to you. sebelius: the cnn website? >> cnn ran a story that the healthcare.gov website was hacked last week. i will get this to you and would appreciate your response to that. mr. terry had asked a question about he wanted to get the information of the number of people signed up, is that you would not provide that because it is not accurate. would you provide us with the number of people who have been able to enroll on the telephone, the president gave an 800 number, can we get the number of people who have enrolled on the telephone? sebelius: no, sir. we do not have reliable enrollment data. we will have that to you the middle of november as we have committed to you. we are collecting state data, telephone data, paper data, website data. we want it to be reliable and accountable. >> telephone data does not seem like it is eas difficult to colt
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since the numbers are low. you are familiar with the appointment to the overseas. sebelius: i asked him to serve in capacity, yes. >> many of us in the energy commerce are not as comforted as you buy that selection because if you will recall his history with the subcommittee is not great. he was involved with solyndra. we asked them to talk about it in 2011. he refused requiring a subpoena. will you commit to making him available to our subcommittee for our questions? sebelius: congressman, you are welcome to ask him to come before the committee. he is volunteering his services to us for a period of time. he has been appointed by the president to start in january as the head of the economic council council. he was a deputy director for management and performance.
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i am thrilled that he is going to take on this assignment and help us drive the management. >> again, his appearance here will be important. a lot of people are asking if the president's words leading up to this law, if they matter. and the statement in the "washington post" today edited the president's statement saying if you like your health care plan, you will be able to keep your health care plan if we deem it adequate. that seems a more operational statement. if you go back a few years into the federal register and i am quoting from the federal register from july 23 of 2010, just a few months after the law was signed. the interim rule for the dealing with the grandfathering written into the federal record because newly purchase individual individual policies are not grandfathered. the department expect a large population policies will now be grandfathered covering up to an exceeding 10 million people. i hope the president was apprised of that before he made
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these statements because clearly his statement was not operational psp one that is an insurance companies choice. the president made it clear and our policy was a grandfather clause in both employer-based coverage and in individual coverage. sebelius: in the register, both in the comments made. sebelius: these are private insurance plans making private decisions. >> you serve for the president, but we have had many of your employees here in front of this committee and you do have to ask yourself are they being purposely misleading or are they really not that smart? i'm going to ask you this morning for the sake of the future of health care in this country will you please ask for the resignation of gary gohen because he has repeatedly come to this committee and misled us. sebelius: i will not, sir. >> i think the record ought to
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be clear about jeffrey, he was invited with less than a weeks notice to to come before this committee, he could not make it that day, he asked for some other day. he had nothing to do with the solyndra contract and he did come before us and talk about it. his sole role is to represent them and i don't think he ought to have any disparagement of jeffrey. very well-regarded public servant. >> thank you, mr. chairman. welcome, madam secretary. now we all agree the website problems must be resolved. in this country developed the internet and concept of the website. so there are high expectations. the fact that the hired public contractors cannot build the website in three years is unacceptable. i hope the administration will
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pull those accountable. but we can't lose sight of the big picture that when this is all said and done, every american will have affordable quality health insurance and health care. this is a goal i believe of all democrats and republicans. the aca is working in california and wor working in my district n sacramento. i want to tell you of a bette li got from a constituent. as a self-employed contract employee i have had individually purchased health insurance for 11 years now. assurance that has gone up every year, sometimes more than once. insurance that wouldn't let me add my daughter with my ex-husband covered them both. insurance that i have underused for fear they would drop me. ensure that has dropped me anyway because they decided they would no longer offer individual plans. this could have happened to me at any time. i'm so grateful before the cataract division makes it possible to get health insurance beginning in january for me and my daughter.
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as all this is happening i have finished graduate school and started my own business. slowly but surely things are happening and i will be hiring my first employee in the next six months. the provisions of the aca are helping me in this, i can clearly see what it will cost me to provide health benefits for my future employees, understand these costs and build my business plan accordingly. and that is just one of the letters i received. now, i've also heard from my colleagues on the other side of the aisle complain again and again about how health care reform is increasing health care costs. but the empirical evidence shows something quite different. the recent trend in medicare spending growth is quite remarkable. medicare spending growth is at historically low levels growing less than one half of 1%. fiscal year 2012. following slow growth in 2010, 2011.
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the same is true on the private side of health care. personal consumption expenditures on health care, everything from health insurance to drugs to hospital care rose by just over 1% in the past ye year. this is the slowest increase in nearly 50 years. madam secretary, what does this data tell us about what has happened to health care cost since the aca became law? >> congresswoman, you are absolutely right. since the president signed the affordable care act we have seen a great slowdown in the extraordinary cost increases year and an ear out for health care in the medicare plan and medicaid plan and private insurance and underlining health care cost which affect every american. some of that is to do what some of the features currently in place around different care delivery and different payment systems that we are helping to drive given the tools that we have with the affordable care act. trying to prevent hospital
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readmissions. medical homes that prevent people in the first place or help them stay healthy in their own homes and their own places. >> so is through the private insurance cost are growing also, is that true? sebelius: that's true. >> i also cracked the aca premiums are coming in lower than predicted by experts? sebelius: they are on average 15% lower than was estimated that the premiums would be, and that is the premiums, not accounting for the number of uninsured or underinsured americans who will then qualify for financial help. they get some help from the taxpayers paying for that coverage. >> thank you, madam secretary. >> thank you, mr. chairman. madam secretary, when you spoke at the democratic national convention in charlotte last september, one of the first
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statements he made about the affordable care act was "but for us democrats, obamacare is a badge of honor because the matter who you are, what state of life you are in, this law is a good thing. first, if you already have insurance, you can keep it. ". i would call this the red herring that misled voters intentional or not. now perhaps had you known that millions would lose their coverage, families would face financial disaster is one constituent recently told me or that the exchange rollout would be plagued by a multitude of multiple delays we have seen, you would not consider such a badge of honor. the fact is your words and those of the president, and he campaigned last year if you already have assurance you like you can keep it, seemed to be directly refuted by the millions of cancellation notices already sent to americans just in the past few weeks. whether your statement was
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inaccurate or as they said yesterday not precise enough, it does strike me as millions of individuals who by listening to speeches like yours boated believing one thing now find themselves without coverage and are now scrambling to find coverage in a marketplace that is often more expensive plans with fewer options. in response to my constituents calls for help, i created a portal on my website, no patches or fixes needed, that allows those who have experienced problems reach out and tell me about their personal experienc experiences. and just the last few days my office has received dozens of complaints regarding increases in their monthly premiums. i received one such notice from a mother in her early 50s who just received a notice that not only will her insurance premiums double, but she will also switch insurance, keeping the doctors due to the fact the affordable